Contact Information 
District Offices
315 East Market Street
Suite 100
Clearfield, PA 16830

(814) 765-0609

Fax: (814) 765-0592


264 Haida Avenue
Suite A1
Hastings, PA 16646.
Phone (814) 247-6210
Fax (814) 247-6212

Satellite Office 
Monday, Wednesday, Friday
9 a.m. to 4:30 p.m.
600 Lingle Street, Suite 100
Osceola Mills, PA 16666
Phone: (814) 339-6544
Fax: (814) 339-6546

Capitol Office
115 Ryan Office Bldg.
PO Box 202073
Harrisburg, PA 17120-2073
Phone: (717) 787-7099
Fax: (717) 782-2922
Fixing Pennsylvania’s Pension Crisis
10/28/2013

By State Rep. Tommy Sankey
74th Legislative District

Pension reform may not exactly be the topic conversation around the dinner table. But Pennsylvania’s pension crisis impacts nearly every one of our citizens in one form or another.

It is true that funding decisions made by previous administrations, combined with an underperforming stock market, have been the biggest contributors to the current $41 billion unfunded liability of our two public pension systems, the State Employee Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS). The cost of doing nothing increases on a daily basis, and translates into higher property taxes, an inability to fund public education in the manner in which it deserves and painful cuts to critical government programs.

There are currently three House proposals on the table for consideration. The latest, which belongs to Rep. Glen Grell (R-Cumberland), would not have a negative impact on the benefits of current retirees, or those very close to retirement, and would not impose wholesale changes to retirement benefits for existing employees.

The Grell plan asks current public employees to elect to have less taken out of their paychecks for retirement going forward in exchange for a lower contribution rate. They would also agree to have their pension calculated on their five highest salary years as opposed to the current three years. It would assign new employees to a cash balance pension system that would guarantee them a minimum investment rate of 4 percent with employee contributions of 7 percent of their pay and employer (taxpayers) contributions of 4 percent. The plan is also dependent on the state borrowing as much as $9 billion to apply toward the unfunded liability, with that figuring shrinking if enough current employees elect to accept the concessions.

State Rep. Warren Kampf (R-Chester/Montgomery) has authored House Bill 1352, which addresses school district employees, and House Bill 1353, which deals with state employees. Kampf’s legislation would move new hires to a defined contribution system that more closely matches the retirement plans in which most Pennsylvanians working in the private sector are enrolled. It also offers an option that allows current employees to move into a defined contribution system if they choose. This would give them, and new hires, control over their retirement funds that they have not enjoyed in the past.

Finally, state Rep. Chris Ross (R-Chester) is sponsoring House Bill 1350, legislation backed by Gov. Tom Corbett. Under the Ross plan, defined contribution plans would be created for all new state and public school employees, beginning Jan. 1, 2015 (SERS) and July 1, 2015 (PSERS). Defined pension benefits for current members for work performed after 2015 would be altered.

Pensionable income under the Ross plan would be capped at the Social Security wage base, which is $113,700 for 2013, and pensionable compensation would be capped at 110 percent of the average salary of the prior 4 years when determining an employee’s final average earnings. The final average salary calculation would be based on five years, and the multiplier for all employees currently above the two percent level would be reduced by 0.5 percent, except for those already buying up. There would also be an option to buy up to retain higher multiplier.

The limits of writing space force me to mention only highlights of these plans. As you can see, Pennsylvania’s pension crisis is not an easy one to understand, nor an easy one to solve. What every one of us needs to realize is we all have been and will continue to pay dearly for this problem in various forms until a solution is reached. The time for finger pointing is over, and we must put past transgressions aside in order to save our future.

Questions about this or any legislative topic should be directed to my Clearfield district office at (814) 765-0609 or my Osceola Mill office at (814) 339-6544.

Representative Tommy Sankey
74th District
Pennsylvania House of Representatives

Media Contact: Scott Little
717.260.6137
slittle@pahousegop.com  
RepSankey.com / Facebook.com/RepSankey
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